STATE OF MADRAS versus P. M. BATCHA & COMPANY

Citation: [1967] 3 S.C.R. 617 · Decided: 12-04-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

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STATE OF MADRAS 
v. 
P. M. BATCHA & COMPANY 
April 12, 1967 
{J. C. SHAH, S. M. SIKRI AND V. RAMASWAMI, JJ.] 
Madras General Sales Tax Act, 1939, ss. S a11d 11; Madras General 
Sales fox Act, 1959, s. 32-'Nil' assessment made b,v Commercial Tax 
Officer 11nder s. 5 of 1939 Act-Order no1 communicated to 1Msessee-
Change of judic~ai view reRardin11 MXinR 
provi'iions-Power of Depury 
Commissioner of Commercial Taxes under s. 32 of 1959 Act to revise 
order of 'Nir asseisment-Assessee's 
whtther 
had right to fil1 apptMI 
against 'Nil' assessment under s. 11 of 1939 Act-Effect of such right on 
powers of Dtputy Commissioner 11nder s. 32. 
The respondent firm carried on· business in hides and skins in Madras. 
For the assessment year 1953·54 they applied for a licence under s. S 
of the Madras General Sales Tax Act, 1939. The Commercial Tax Offi· 
cer relying on a judgment of the Madras High Court held that the res· 
pondent was not liable to tax and made a 'Nil' assessment. The order 
was however not commu11icated to the respondent. . The afores<1.id jud2-
ment of the Madras High Court was later reversed by this Court. The 
Deputy Commissioner of Commercial Taxes Madras, being of the view 
t1tat the- nrder of 'nil' a!sessment relating to 1953-54 was 
illegal com .. 
menced proceedings under s. 32 of the Madras General Sales Tax Act, 
1959 and thereafter assessed 
the re•pondent. The Sales Tax Tribunal 
confirmed the order of Commercial Tax Officer. The High Court in revi-
sion held that since the Commercial Tax Officer had not communicated 
his order to the assessee the time for appeal had not expired and there-
fore the Deputy Commissioner had no power. to revise the order under 
s. 32 of the Act of 1939. The State appealed. 
HELD : In the present case no tax was assessed, not even the taxable 
turnover was determined. No aooeal conld h('!···fore lie under s. 11 of 
the Act of 1939 against the order of 'Nil' assessment. There was thus 
no bar against the exercise of jurisdiction of the Deputy Commissioner 
under s. 32(1) to commence proceedings of re·assessment. 
[6210] 
Ml s. M.A. Noor Mohamed & Company v. State of Madras & Anr., 
A.I.R. 1957 Mad. 33 and State of Madras & Anr. v. Mis. M. A. Noor 
Mohamtd & Company, A.I.R. 1960 S.C. 1254, referred to. 
S. B .. Periasanii Nadar and Company v. State of Madras, 13 S.T.C. 
328, approved. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 578 of 
1966. 
Appeal by special leave from the judgment and order dated 
August 31, 1964 of the Madras High Court in Tax Case No. 127 
of 1963 (Revision No. 83). 
P. Ram Reddy and A. V. Rangam, for the appellant. 
R. Ganapathy Iyer, for the respondent. 
.() 1 8 
SUPREME COURT REPORTS 
[1967] 3 S.C.R. 
The Judgment of the Court was deliver-ed by 
Shah, J. 
The respondents are a firm carrying on business in 
hides and skins in me State of Madras and is registered as a 
"dealer" under the Madras General Sales Tax Act 9 of 
1939. 
For the assessment year 1953-54 the respondents applied for a 
licence under s. 5 of the Madras General Sales Tax Act and pro-
visionally paid a sum of Rs. 450 towards licence fee. The respon-
dents were directed to pay an additional amount of Rs. 
400. 
The respondents declined to pay the additional amount and in-
formed the as~essing authority that the transactions c~rried on 
by them were of the nature of export of hides and skins and no 
:sales-tax was payable on goods exported to places outside India. 
The Commercial Tax Officer scrutinised the accounts of the 
respondent for the year 1953-54 and by order dated March 29, 
1957 determined their turnover from purchases of hides and skins 
from dealers outside the State and from dealers within the· State 
both tanned and untanned and of sales of tanned hides and skins 
-0n behalf of resident and non-resident principals. 
B1!ti following 
the j11dgment of the Madras High Court in Messrs. M. A. Noor 
Mohamed & Company v. The State of Madras and Another(1). 
the Commercial Tax Offiper held that the respondents were ex-
empt from tax and no licence fee for the year 1953-54 was 
payable. 
He, therefore, declared that there was no demand 
under s. 8(B) (2) of the Act, that the tax due for the year was 
nil and that a notice in Form 'C' be issued for refund of Rs. 450 
paid by the respondents. 
No intimation of this order was given to the respondents. 
The judgment of the Madras High Court in 
M. A. Noor 
Mohamed's case(') was carried in appeal to t

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